Testing the validity of the Environmental Kuznets Curve hypothesis with the economic complexity index and technological innovation

In this thesis, economic growth, technological innovation and economic complexity between 1998 and 2018 for the top 10 countries with the highest economic complexity index (Japan, China, Switzerland, Germany, South Korea, Singapore, Czech Republic, Sweden, Austria, USA). The effects of the index on environmental pollution were examined within the framework of the EKC hypothesis. The second generation CIPS panel unit root test, which takes into account the cross-sectional cross-section, was used to test the stationarity of the dimensions. According to what is obtained from the analysis, it is found that while it is stationary at the level of ecological footprint and economic complexity, it is not stationary at the level of all other variables and the different structure becomes stationary at the I(1) level. Durbin-Hausman panel cointegration test was performed in the area where the second structure was observed in the cross-sectional section. The results of the cointegration test show that there is a cointegration relationship throughout the panel. Accordingly, the variables move together in the long run. The estimated coefficients show that the EKC hypothesis is valid for Switzerland. After this stage, the long-term correlation coefficients were calculated using the AMG estimator. Accordingly, for Switzerland, as economic growth increases up to a certain threshold value, environmental pollution will also increase, but when the threshold value is exceeded, environmental pollution will begin to decrease as economic growth increases. In addition, the results of the research support that the EKC hypothesis is not valid in the other 9 countries. By examining the findings of the Emirmahmutoğlu and Köse panel causality test, which was conducted at the last stage of the study, the causality relationship from environmental pollution to economic complexity index and technological innovation was determined. In addition, while causality is found from technological innovation to environmental pollution and economic growth, causality from economic growth to environmental pollution, economic complexity and technological innovation has also been found. According to the general thesis, it is seen that economic growth, economic complexity index and technological innovation will have positive contributions if environmental economic activities are provided.